Correlation Between Guangzhou Baiyunshan and HANSOH PHARMAC
Can any of the company-specific risk be diversified away by investing in both Guangzhou Baiyunshan and HANSOH PHARMAC at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Guangzhou Baiyunshan and HANSOH PHARMAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guangzhou Baiyunshan Pharmaceutical and HANSOH PHARMAC HD 00001, you can compare the effects of market volatilities on Guangzhou Baiyunshan and HANSOH PHARMAC and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Guangzhou Baiyunshan with a short position of HANSOH PHARMAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Baiyunshan and HANSOH PHARMAC.
Diversification Opportunities for Guangzhou Baiyunshan and HANSOH PHARMAC
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guangzhou and HANSOH is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Baiyunshan Pharmaceu and HANSOH PHARMAC HD 00001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANSOH PHARMAC HD and Guangzhou Baiyunshan is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Guangzhou Baiyunshan Pharmaceutical are associated (or correlated) with HANSOH PHARMAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANSOH PHARMAC HD has no effect on the direction of Guangzhou Baiyunshan i.e., Guangzhou Baiyunshan and HANSOH PHARMAC go up and down completely randomly.
Pair Corralation between Guangzhou Baiyunshan and HANSOH PHARMAC
Assuming the 90 days horizon Guangzhou Baiyunshan Pharmaceutical is expected to generate 0.29 times more return on investment than HANSOH PHARMAC. However, Guangzhou Baiyunshan Pharmaceutical is 3.39 times less risky than HANSOH PHARMAC. It trades about 0.05 of its potential returns per unit of risk. HANSOH PHARMAC HD 00001 is currently generating about -0.01 per unit of risk. If you would invest 210.00 in Guangzhou Baiyunshan Pharmaceutical on September 25, 2024 and sell it today you would earn a total of 2.00 from holding Guangzhou Baiyunshan Pharmaceutical or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Baiyunshan Pharmaceu vs. HANSOH PHARMAC HD 00001
Performance |
| Timeline |
| Guangzhou Baiyunshan |
| HANSOH PHARMAC HD |
Guangzhou Baiyunshan and HANSOH PHARMAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Baiyunshan and HANSOH PHARMAC
The main advantage of trading using opposite Guangzhou Baiyunshan and HANSOH PHARMAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Baiyunshan position performs unexpectedly, HANSOH PHARMAC can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in HANSOH PHARMAC will offset losses from the drop in HANSOH PHARMAC's long position.| Guangzhou Baiyunshan vs. Merck Company | Guangzhou Baiyunshan vs. Takeda Pharmaceutical | Guangzhou Baiyunshan vs. HANSOH PHARMAC HD 00001 | Guangzhou Baiyunshan vs. Elanco Animal Health |
| HANSOH PHARMAC vs. Merck Company | HANSOH PHARMAC vs. Takeda Pharmaceutical | HANSOH PHARMAC vs. Guangzhou Baiyunshan Pharmaceutical | HANSOH PHARMAC vs. Elanco Animal Health |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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